Indeed the default location of the uvncrepeater.ini file is /etc.In the /etc/init.d/uvncrepeater file it is set up as /etc/uvnc/uvncrepeater.ini, so if you want it instead at /etc folder you can change it in the init.d script - parameter UVNCREPINI.

To run the service in terminal so that you can see the log files, while leaving the ini file in /etc/uvnc you can use the following command:

uvncrepeatersvc /etc/uvnc/uvncrepeater.ini

Regarding the settings in the uvncrepeater.ini file i would suggest the following:

As a note, I've had a repo with my mods and fixes up at http://code.google.com/p/uvncrepeater/ for almost a year now. I'd love to get a bit more traction in the repo, and would be happy to grant commit access to people who want to mod it.